Wednesday, June 19, 2013

'Why' the headline?

The Wall Street Journal's Holman Jenkins Jr. has an opinion piece today with the headline, The Young Won't Buy Obamacare. There is a bit about that in the body of the article, that Obamacare is going to be asking 'the young' to increase their spending (for other people's healthcare, not their own) from about $800 per year to over $5,000, but that's hardly the meat of the piece.

A better headline would have been, Why Healthcare Costs so Much, because that's the question Jenkins answers; It's that consumers of healthcare rarely pay directly for it, and thus the monitors of the spending aren't as effective in keeping down costs as they could be.

In the automobile market, dealers publish prices on their websites and in ads that are always lower than the sticker prices. Why?

Independent websites like Edmunds.com, AutoTrader.com and Kelley Blue Book publish detailed pricing information for consumers and do so for free. Why?

The answer is obvious. Consumers want such information and businesses see opportunity in providing it, even for free, in order to attract eyeballs for advertising.

Such information doesn't exist in health care because consumers don't demand it, because somebody else is almost always paying for our health care. Those of us who aren't subsidized directly by Medicaid, Medicare and the Veterans Administration are subsidized through the tax code to channel all our aches and pains through a third-party payment mill, disguised as employer-provided "insurance."

Which provides the explanation of the games people play regarding spending on medical treatment, such as;

Medicare is portrayed as getting the best deal from the system because Medicare pays less per service. But remember how the system works. Who's to say Medicare doesn't pay less per procedure because it's being billed for many more procedures, because that's how providers are allowed to maximize their revenues from the payer known as Medicare?

In fact, plenty of evidence suggests this is exactly how Medicare operates. And Congress understands as much, hence the 25% cut in physician reimbursements it keeps threatening to impose is informed partly by expectations that physicians could maintain their incomes by charging for more services.